£25k owing on btl mortgage-worth remortgaging?

[MarsellusWallace]

I have one btl which has a mortgage of roughly £25k outstanding and is on the svr of 4.95%.I pay circa £550 PCM and it has roughly 5 years to run.Could I save anything by remortgaging on a fixed/discounted rate for the remaining term?Im not interested in increasing the term.

[Sarnie]

Potentially yes.

There is a five year fixed rate at 3.98% that would take you up to the end of your mortgage term.

[mcflurry]

At that level, I would imagine the fees would take out a disproportionate chunk of the savings

IANAMA

[Burrow01]

Sarnie said:

Potentially yes.

There is a five year fixed rate at 3.98% that would take you up to the end of your mortgage term.

What LTV would you need for that rate?

[Sarnie]

mcflurry said:

At that level, I would imagine the fees would take out a disproportionate chunk of the savings

IANAMA

I wouldn't have posted it if that was the case

[Sarnie]

Burrow01 said:

What LTV would you need for that rate?

It's available up to 60% LTV and has a £625 Arrangement Fee but there is also £750 cashback

[MarsellusWallace]

Sarnie said:

Potentially yes.

There is a five year fixed rate at 3.98% that would take you up to the end of your mortgage term.

Do you know roughly how much I will save over the length of the loan?

[Sarnie]

MarsellusWallace said:

Do you know roughly how much I will save over the length of the loan?

Well, this products payment would be £460pm, so £90 per month saving, based on your figures;

£90 x 12 x 5 = £5,400

[MarsellusWallace]

Sounds a great saving,and please excuse me for being a bit thick,but my man maths sees a 1% interest saving over 5 years on a diminishing value.At £25k the interest element is roughly £1250 per year but obviously that drops month to month as the capital is paid off,dropping to zero interest at the end of year five.Can I really save over a grand interest per year on average?

[Maryben]

Sarnie said:

Well, this products payment would be £460pm, so £90 per month saving, based on your figures;

£90 x 12 x 5 = £5,400

Not quite comparing like for like :

£25,000 @ 4.95% over 5 years on a repayment basis = £471
£25,000 @ 3.98% over 5 years on a repayment basis = £460

Therefore savings = £11 x 12 months x 5 years = £660

[MarsellusWallace]

Sounds like I need to put the exact figures and remaining term to give a more accurate picture.I will dig out the mortgage statements and try and get a current redemption figure and exact remaining term and report back.

[Sarnie]

MarsellusWallace said:

Sounds like I need to put the exact figures and remaining term to give a more accurate picture.I will dig out the mortgage statements and try and get a current redemption figure and exact remaining term and report back.

Good idea!

My thoughts are that either your balance is higher than £25k or your term might be under 5 years. Either way, once resolved, the rate is still 1% lower than your current product so it will save you money.

[MarsellusWallace]

Ive looked through the paperwork and the outstanding balance is £25k give or take a few pence.The remaining term is 4 years and 4 months.Monthly repayment £540.49

The earlier calculation of percentage difference to give a saving of £11per month seems accurate so not a tremendous amount to save for the hassle.

Im going to go with plan b and increase monthly repayments to £1000.That should see the remaining term cut considerably and also give a useful reduction in the overall interest paid.

Thanks to all who replied.

[Sarnie]

MarsellusWallace said:

Ive looked through the paperwork and the outstanding balance is £25k give or take a few pence.The remaining term is 4 years and 4 months.Monthly repayment £540.49

The earlier calculation of percentage difference to give a saving of £11per month seems accurate so not a tremendous amount to save for the hassle.

Im going to go with plan b and increase monthly repayments to £1000.That should see the remaining term cut considerably and also give a useful reduction in the overall interest paid.

Thanks to all who replied.

As I said in the post above, your balance had to be higher or the term shorter than 5 years, which is how it turned out, good luck!

[Dick Dastardly]

I was told that you can't get a BTL mortgage for less than £30k these days. Is it not the same for remortgages also?

[Sarnie]

Dick Dastardly said:

I was told that you can't get a BTL mortgage for less than £30k these days. Is it not the same for remortgages also?

Minimum is usually £25k.....